FEDERAL COMMUNICATIONS COMMISSION
Washington, D.C. 20554
In the Matter of
Lifeline and Link Up Reform and
Federal- State Joint Board on Universal Service
Lifeline and Link Up
WC Docket No. 11-42
CC Docket No. 96-45
WC Docket No. 03-109
INITIAL COMMENTS OF NALAIPCA TO THE
NOTICE OF PROPOSED RULEMAKING ("NPRM")
ON LIFELINE AND LINK UP REFORM AND MODERNIZATION
The National ALEC Association/Prepaid Communications Association (hereafter
"NALAIPCA") is an organization of telecommunications providers that focus their marketing
efforts on low income consumers. The telecom company members1 include CLECs providing
wireline services as well as wireless providers. Several companies hold Eligible Telecom Carrier
designations from various state commissions and are experienced providers of Lifeline and Link
Up services to qualified consumers.
NALAIPCA provides the following comments in response to the Commission's NRPM
and reserves the opportunity to provide reply comments on issues it does not address in these
1 NALAIPCA membership includes Absolute Home Phones, Inc.; Aegis Telecom, Inc.; Amerimex
Communications Corp.; Assist Wireless, LLC.; Assurance Home Phone Services, Inc.; DPI
Teleconnect, LLC; Gulf Coast Home Phone Service, Inc.; Express Phone Service, Inc.;
NewPhone, Inc.; QTel, Inc.; Reunion Communications, Inc. ; Midwestern Telecommunications,
Inc.; Express Connection, LLC; Global Connection Inc. ofAmerica; Ready Wireless, LLC;
TerraComm, Inc.; BeQuick Software, Inc.; CGM, LLC; Expert Communications Marketing,
Inc.; Overgroup Consulting, LLC; and Telecom Service Bureau, Inc.
Clarifying Consumer Eligibility Rules - One Per Residential Address Requirement
NALAIPCA urges the Commission to abandon the "one service per residential address"
approach and instead allow the Lifeline/Link Up programs to provide support for one wireless
service per eligible adult? For wireline services, the existing single-line per residence
requirement can continue in effect as it is commonplace for multiple adults to share a residential
Wireless service is by its mobile nature, necessarily tied to the individual and not to
multiple users within a household. Increasingly, a wireless telephone is crucial to an individual's
ability to obtain, and keep, a job. Wireless telephone service is often the gateway to full
participation in society. NALAIPCA members have noted that low income wireless customers
also move frequently; tying support to a residential address further frustrates otherwise qualified
users in their desires to have telecommunications services.
The societal benefits from having more qualified adults with their individual telephone
services, and thereby having more access to the economy and jobs, should take precedence over
concerns about the growth of the low income fund. As discussed below, NALAIPCA suggests
that the fund for Lifeline and Link Up reimbursements be allowed to grow and if reductions in
benefits become necessary for the overall viability of the USF, such reductions come from the
high-cost fund first. Basic universal service goals of access to telecommunications services can
be best served for the largest number of consumers through the Lifeline / Link Up programs'
provision of support for one wireless service per qualifying adult.
2 Notice of Proposed Rulemaking ("NRPM") herein at 11110.
Customary Charge for Commencing Telecommunications Service.
NALA/PCA understands the proposed amendment to define "customary charge for
commencing telecommunications service" as the ordinary initiation charges that an ETC
routinely imposes on all customers within a state.3 One modification is suggested to the
proposed rule. The second sentence within the proposed sub-part (e) should be changed to read:
"Such a charge is limited to an actual charge assessed on all customers to initiate service
for a similar service with that ETC." [Proposed additional language in underline.]
Telecommunications companies may offer numerous service options to the public with
varying charges for commencing services due to differences in features and payment plans.
ETCs should only be required to demonstrate that the service commencement fee for the service
plan offered to Lifeline customers is also charged to non-Lifeline customers for the same service
Exceptions should be made where a state commission has ordered ETCs to waive the
remainder of connection charges not reimbursed by the USF.4
The Commission should not adopt a rule that prohibits resellers from imposing a
connection charge on consumers when the underlying wholesale provider has not assessed a
similar connection charge on the reseller. 5 Connection charges are assessed by
telecommunications companies to recoup their own costs of providing service including
marketing, Operations Systems Support ("OSS"), and customer service representatives.
3 NPRM at Appendix A at 47 C.F.R. §54.413
4 NPRM at '1174.
5 Id. at ~76.
Individual companies make their own determinations as to whether these costs should be
recouped from recurring costs for basic service or in one time initial service connection fees.
These decisions should not be micro-managed by regulators and should instead be left to
business managers to enable them to respond to the marketplace and to have the ability to
differentiate their services from competitors. So long as the connection charge is assessed to the
public at large for the same service plan, there should be reimbursements through the Link Up
program for revenue foregone by reducing the charge to qualified low income customers.
The current $30 cap on Link Up support should be maintained and not decreased.6 While
some costs for service initiation have decreased due to mechanization and software innovations,
other costs such as labor and advertising have increased.
The Commission's proposed rule changes in this NPRM should go far to eliminate waste,
fraud and abuse. The Commission should not impose any new and burdensome requirements for
ETCs to submit cost support to USAC for the revenues they forgo in reducing customer service
connection charges.7 The standards for such cost support are likely to be controversial and
complicated for small businesses and will certainly increase the costs of doing business with
resulting price increases to consumers for no real benefit. Furthermore, USAC would be diverted
from its primary functions, and attention would be taken away from USAC's overall compliance
and enforcement responsibilities.
6 1d. at ~78.
7 1d. at 1]79.
NALAIPCA requests that the Commission withdraw its proposed rule for all new ETCs
to be audited after the first year of providing Lifeline-supported service.8 USAC already has full
audit authority and is better able to determine which companies to audit and when. NALAIPCA
fears that an automatic audit after one year of all new ETCs may take away from the discretion
of USAC auditors to concentrate on providers needing earlier audits or unnecessarily divert
attention to companies who have demonstrated a good compliance pattern since initiation of
USAC should be given clear direction that its efforts with respect to audits of new ETCs
should concentrate on education for long - term compliance by ETCs and not on enforcement
Eliminating Reimbursement for Toll Limitation Service
NALAIPCA opposes the elimination of reimbursement for toll limitation service
("TLS,,).9 Toll limitation service remains a valuable management/budgetary tool for end users
and ensures that local service and access to emergency service remains in place for heads of
households. Many consumers prefer the reliability of a non-mobile, always - on wireline service
that allows unlimited outbound and inbound local calling with limited toll calling using TLS.
Without toll limitation service, ETCs will not be able to offer these high value service packages
as unlimited toll calling can quickly exceed the ability of customers to pay and can turn a
minimally profitable service for the ETC providers to a loss.
Sid. at ~98.
91d. at ~70.
NALAIPCA encourages the implementation of a national, centralized database for online
certification and verification of qualifications for the Lifeline and Link Up programs. To be truly
useful and effective, this database should be "real time" and allow ETCs to determine
consumers' eligibility at the time of enrollment. The database should not be one that would be
used at the "back end" such as in conjunction with the filings and review of Form 497 filings.
Use of the database limited to "after the fact" compliance checks would only frustrate consumers
who might have already received subsidized phone service to only have it taken away. Likewise,
ETCs would be frustrated in that the database would not be available to quickly and easily verify
eligibility prior to provisioning services.
NALAIPCA supports allowing consumers to enroll using electronic signatures as well as
interactive voice responses. ETCs should be allowed to keep copies of the electronic data in
simple pdf type format.
Constraining the Size of the Low-Income Fund
NALAIPCA opposes the imposition of any arbitrary cap on the size of the fund for
Lifeline and Link Up programs. The NRPM's proposed rules will greatly eliminate any waste,
fraud, and abuse which may now be occurring. The size of the fund, then, will reflect the need
for programs and the success of ETCs in their required outreach and marketing efforts. lO
10 47 U.S.C.§214(e)(1)(B) requires ETCs to advertise the availability of services supported by universal service
Our nation is beginning its recovery from the worst economic downturn since the Great
Depression. These hard times coincide exactly with time period wherein the low-income fund
grew from $822 million in 2008 to an estimated $1.4 billion in 2010. During this same period
regulators have intensified their calls for more customer outreach. As observed in the Notice
herein, "over the years, the Commission has highlighted the importance of outreach to low-
income customers."ll And again here, the Commission signals the importance of outreach in
seeking comments as to whether specific outreach requirements should be imposed on ETCSl2
and on what steps the Commission could take to encourage state and Tribal social service
agencies to take a more active role in reaching potential Lifeline-eligible consumers. 13
The Commission has further encouraged more telephone companies to provide Lifeline
and Link Up services. The Tracfone Forebearance Order14 is an example. There then-
Commissioner Abernathy noted that a 2004 study by Commission staff indicated that only a third
of eligible households were actually subscribing to the Lifeline program. IS She concluded that
"by providing support to resold wireless services, we are indeed extending a "line" to customers
who might not otherwise make use of the Lifeline program, and thus are helping to fulfill
Congress's vision oftruly universal service.,,16
The growth in disbursements for Lifeline and Link Up subsidies, then, is a common
sense result of increased demand and the success of policy makers in attracting new ETCs which,
following the Commission's directives, are employing more effective and thorough
11 NRPM at 11226.
12 1d. at 11235 and 11
13 Id.at 11233.
14 Order adopted September 6, 2005, Petition of TracFone Wireless, Inc. for Forbearance from 47 V.S.c.
§214(e)(1)(A) and 47 C.F.R. §54.201(i); CC Docket No. 96-45
15 Id. at page 13.
16 1d. (Emphasis in original.)
marketingloutreach strategies. An artificial cap on Lifeline and Link Up would only serve to
penalize those consumers who need access to basic telecommunications services and whose lack
of such services is the core justification for the Universal Service Fund's existence.
Attorney at Law
707 West Tenth Street
Austin, TX 78701
Texas Bar No. 07293850